New start-up Movieclips.com has licensed short clips from movies that are then streamed on its website. The site is designed to entice consumers into paying for the full-length movie after enjoying a short excerpt for free.
The company has secured around 1,400 films and 15,000 clips from various Hollywood studios on its site. The studios get a revenue share on advertising on the films. The site also gets affiliate revenue from DVDs that people purchase through links to sites such as Amazon.com.
The MovieClips venture is backed by $3 million in financing from First Round Capital, Shasta Ventures and angel investors.
“You come to MovieClips and you get curated and easier-to-find clips and we give you all the tools to embed it (on other sites),” said co-founder Zach James, a former Credit Suisse Group investment banker. “And the quality is much better. Our theory is if you give consumers legal alternatives they will choose the legal alternative over piracy.”